COMMENTARY | One of the strategies that the Democrats have hit upon to save off electoral apocalypse is to go all out to raise the minimum wage to $10.10 an hour. But the Congressional Budget Office has confirmed what must economic literates know about the idea.
In essence, raising the minimum wage by that amount will through 500,000 people, most of them low end workers, out of work. Naturally both the White House and big labor are incandescent with anger.
The problem is that the pronouncements of the CBO, officially non-partisan, have been considered the gold standard of economic analysis. The latest report comes hard on the heels of another report that stated that Obamacare will push two million people out of the job market.
No one should be surprised that the CBO reported that hiking the minimum wage will cost jobs. If one increases labor costs, companies will have to find savings. Look for fast food counter workers to be replaced by automatic kiosks. Instead of asking a fresh faced teenager or grizzled retiree for you burger and fries, you’ll punch out your order on a touch screen and, minutes later, have your happy meal delivered by a robot.
The Democrats should be forgiven for going the economic populism route. Boosting the minimum wage always polls well, since low information voters think that it’s free money. If it means that there are fewer entry level jobs, then that can be blamed on some other cause, such as George W. Bush or the evil capitalist exploiters who run McDonalds.
The CBO report gives Republicans some cover to oppose the minimum wage hike, explaining why its supporters in the White House and the labor unions are so irate. They still might ram it through, but they will be less able to demonize minimum wage opponents at hating the working people.